Karachi Stock Exchange Weekly Analysis 27 November, 2011

The Karachi Stock Exchange (KSE) market activity was bearish. KSE – 100 index has reached 11,648.14 points by losing of 289.67 points or 2.4 per cent. The KSE-100 index closed negative in four out of the five trading sessions during the week, following a 0.8% (99 points) decline in the previous week. Political uncertainty along with the International Monetary Fund’s bleak outlook for the country’s economy contributed to the index’s woes.

Following news have played vital role in Karachi Stock Market index movement:

  • Investors have concerns over political uncertainty, resignation of Hussain Haqani and Mullen memo controversy and institutional profit taking for the expectation of status quo in upcoming Monetary Policy on 30 November, 2011
  • Analysts said the International Monetary Fund (IMF) released its economic review of Pakistan highlighting macroeconomic challenges owing to energy crisis and pressures on the external account having a negative impact on investor sentiment
  • IMF released its economic review of Pakistan highlighting macro–economic challenges owing to energy crisis and pressures on the external account
  • Foreigners remained net sellers of $3.8 million
  • The government of Pakistan has raised the wheat support price to Rs 1,050 per 40 kilogrammes (kg) from Rs 950 for the same weight previously
  • The daily turnover declined 26.44 percent to 28.17 million shares as compared with 38.83 million shares of the previous week
  • Major fall in global stocks and commodities on concerns for US economic growth and Europe debt crises affected the investor sentiment
  • Trade remained thin despite OGRA announcements for raise in local gas tariff easing concerns for rising circular debt in the country
  • Experts remained sellers in FFC and recommend sell on strength for FFC. Their recommended price was 180 with a stop loss at 184.75. ENGRO and LUCK still look good, with a stronger bias towards ENGRO in the short term, they added. Increase exposure in ENGRO on close above 132 and in LUCK at 81.50. They said that their sell call in FFBL continued with a covering price of 50
  • NATO’s attack on Pakistan’s territory and reaction of leaders will also set market movement for upcoming week.
  • A hike in wheat support prices coupled with exploration drilling in Zin Block were some of the positives from an otherwise lacklustre week
  • IMF’s Assistant Director says power tariff hike not enough
  • PM gives “in‐principle” approval to 3G spectrum auction policy
  • Remittances up14%MoM in Oct-11 to stand at USD1.018
  • FBR temporarily withdraws 5% sales tax on zero rated sector
  • FX reserves drop to USD16.96 bn
  • Oil import bill surges by 53.9% in 4MFY12

Agritech Limited, Shifa Int Hospitals Ltd, Pak Cables, Security Paper Limited and Rafhan Maize were the major gainers while IGI Insurance, Packages Limited, Pace (Pak) Ltd, Siemens Engineering and International Steel Limited were major losers last week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepancy in the ground realities.

Written by: Rana Khurram

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